How Can the Internet Assist Organizations with Creating Customer Value through Personalization and Mass Customization - Essay Example

How can the Internet and related technologies assist organizations with creating value through personalization and mass customization? When it comes to narrowing down the scope and role of e-marketing and related technologies to a mere aspect of creating value or enhancing customer value, it seems that words are diminishing and the whole aspect can never be explained in its true sense and that it might take years to elucidate such a broad topic. The contributions of e-marketing strategies and organizations in developing and stabilizing many businesses is obvious with the development in the marketing concepts as well as recent researches which are not proving that co-branding, co-creation and third party inventions have set up new mile stones for all the companies; be it some multinational giant or some small entrepreneurial venture. The concepts that have been introduced with an “e” as prefix, like; e-commerce, e-trade, e-business, e-marketing and e-strategy, explain the literal terms of carrying out business via electronic channel, apparently. However, these terms explain some very broad concepts of internet cram which have proved to be revolutionary, immensely, after the internet boom of 90’s. Open innovation and co-creation, intermediation and dis/re-intermediation, these concepts have changed the overall business scenario in every field and industry where internet and related agencies are stepping in. We have limited the research and discussion to just two aspects offered by e-organizations i.e. mass customization and personalization. Mass Customization and e-Technologies/organizations: Collaborative Networked Organizations (CNOs), those which are also known as “third party vendors” and “fourth party logistics/vendors” and Virtual Customer Communities (VCCs) i.e. the company which exist online only, confirm a soaring prospective as drivers of value co-creation and open innovation. They have also been playing role in driving value specifically in collaborative innovation. By giving access to markets and their information, technologies and by sharing risk and amalgamating harmonizing competencies, e-technologies help organizations in conducting their business activities when electronically they are offered the facility of mass customization. This joint venture has proven that it can amplify malleability and suppleness of the companies’ VCS (Value creation systems) to support responding to an external situation like co-creation or collaborative opportunities (external driver). Mass customization is all about sanctioning end clients. It’s about enabling consumers to create what they like, use it the way they want to and ultimately bringing out an idea. Now-a-days this phenomenon is tricking customers because the concept of DIY, which is probably provided to the customers to customize products, is just another way of designing a catalogue that can have permutation options that can be offered. These are also known as interactive catalogues to the front end customers. These catalogue options sometimes can’t be added or manufactured directly by the manufacturer so the offer is incorporated into the business this way, to avoid any loss of perspective revenue with incurring minimal additional cost. Critiques assume that generative design technologies may help in a situation, where mass production facilities can come into play. An example of e-business providing mass customization is of companies from China and Japan. A website known as www.alibaba.com provides millions of manufacturers who are sitting there to provide mass customization to their customers in the best possible manner, at discounts and in bulks. Sometimes they also waive off all the freight prices and transportation cost to help their consumers make money and save money. These companies provide just the local made version of any international product or they can even manufacture a complete idea of yours by starting from the scratch. Such an opportunity is giving way to young and talented entrepreneurs who can understand the modern consumer well, their needs, affordability and likings or disliking. A Generative Design explains the concept of engendering useful design potentials. These possibilities are spawned by use of random numbers and now these numbers can also be created by customers. Eventually these random components or numbers are then replaced by perspective or current customer preferences, the shape, texture and even color of complex consumer products and a product stands bare. More importantly this generative design can also be tailored according to the production and budget or price constraints, which most of the e-technologies are now incorporating into their GD systems available online. Although co-creation was thought to be expensive yet the companies are now extracting benefits from the marketing advantages of co-creation and mass customization. Thus, we see here that a generative design, an interactive application design, all provided by e-tech companies to the consumer for mass customization breeds the following direct and indirect benefits; Providing the consumers i.e. B2B or industrial consumers with the opportunity to avoid any unbearable or huge costs of business setup or infrastructure Manufacturing according to the mind of the intermediary manufacturer or consumer. All the possibilities which might seem nonfunctional to others can breed results here in minimal additional costs and loss Generates good will and a pool of customers which are highly satisfied with the product as they have made their own product Entrepreneurial abilities flourish as the customer who have new ideas can start off by just sharing their ideas with minimal initial investment Co-creation and open innovation involves end consumer and the intermediary consumer somehow. Thus, creating a situation of third party innovators and creative people Bulk production has always fancied companies who want to avoid any seasonal affect on sales Industrial consumers are more likely towards this B2B online mass customization as compared to individual consumers “Cybermediation (Giaglis et al, 2002) related to creation of new kinds of intermediaries that simply could not have survived prior to the advent of e-Business and the Internet, these include searching, price settlement, transportation or logistics and trust. Some common examples include comparison and online shopping sites such as Amazon.com and bank account services like those offered by Citibank and RBS” Mass customization provided by e-businesses also helps consumers in preventing their value chain to get affected from any bugs. They keep the processes clean and clear. Minimal human resource is required thus giving way to saving of dollars Ethical consideration for companies involved in mass customization is that they should not steal away people’s ideas and designs without their consent, or atleast their names should be mentioned or they should be given patents for that. This will avoid the promotion of negative feeling among people. Personalization and e-Technologies/organizations: Personalization has been one of the major factors contributing towards the success of products since long. Earlier it was started by Luxury goods like cars and Gangster bikes followed by the apparel sector across the globe, but now, there is a huge market looking for and providing personalization to each and every customer. Thus, creating and enhancing customer value by providing unique consumer experience to every customer. Personalization is not about providing value through individual experiences but also by giving your own customers a way to your research and development section. This, again, is the concept of value creation through the use of co-creation. Big multinationals are failing by not providing customization and personalization at the individual level, and on the other hand small entrepreneurial ventures are flourishing by first providing e-based customization and then personalization. Talking about it in the monetary value, personalization provides enhancement to the great customer experience that the company is delivering which promises constant and continual cash inflows for the company. It is one of the recent trends in e-commerce. Companies and businesses are now trying not to be everything for every customer but to be something to some customers. Nowadays, the companies are trying to develop such sites which are user friendly and help the user find he wants. Some of the websites are of the sort that enables the user to put on his type of requirement and post anything he likes; that is like collaborating towards its development. This helps them to get precisely what they need. For more enhancements, websites use the technique of Personalization which helps them to convert larger amount of information into precise and concise ones. When talking of the application of this personalization technique, it was estimated that it requires more time and cost, but it gives advantage over your competitors because it would contain that edge that others do not possess. The user will feel more comfortable in using it against the competitors. You have to conduct some kind of research and gather information from the users before doing so. More and more information gathered from customers helps improve the design of personalization features. The information gathered can be best organized if it is done slowly and step wise according to a process. Everybody dislikes long questionnaires and there are chances that some of them get back to you blank, which would hinder the process in many ways. The information would be incomplete and incorrect. One has already the required information about its users on how do the customers shop online and what they buy from you if you are an internet only business and have a brick and mortar facility available. If this information is combined with what you have already learnt, that can help you immensely in formalizing your website in the way your customers want. The personalization design and features would matter a lot. A mix of that right design and what your customers want is the key to success. Some of such businesses have shoppers club that have information of their precious customers, help can be taken from such information too to formulate your websites in a better way. That gives the website a “personal” touch for the customers and they find it easy to shop online. The customers will appreciate such a movement because their information is transformed into what they actually need. Benefits of Personalization Make accounts and information handling techniques to store consumer data. Information can be extracted from that when needed. It’s lucrative and easier to sell this way. Learn more about customers--learn and understand their preferences and how is that helpful to the organization. Generates a stable base of goodwill by making customers realize that there is a company which cares for all the trivial thoughts and make them special for them, transforming them into a great experience Tracking the customer with webs personalization grants you a commanding tool to scrutinize the performance of a Web site.  Personalization can help you to keep an eye on what makes you noticeable among your customers By the help of personalization, companies also get ideas, free of cost and their feasibility is checked automatically For the success of such businesses, they can go on to make wizards to store and retrieve consumer information in the hour of need. It is useful to make contacts with the consumers and recommend them new offers. An example of Internet personalization is one-to-one marketing. The true essence of personalization is usually amalgamated with customization, which is tagged as casing of information in a customized way. A real life example of highly personalized services is Amazon.com. It usually recommends its customers according to the type of shopping they do. Amazon makes "instant recommendations," i.e. suggest its consumers the products that they might love to buy or would be interested in. The ethical requirements for personalization comes both on companies’ and customer’s part where everyone should take care of the cultural impact. Also, another factor that should be taken care is of the patent rights of the origin of idea and design. If taken consent and given royalty for co-created ideas and innovation, they can have a larger pool of satisfied customers and stakeholders. Bibliography Anderson, D. D. (2005). Build-to-order and Mass customization. United States of America. B2B Personalization Revisited. (n.d.). Retrieved Feb 22nd, 2010, from Clickz: http://www.clickz.com/843541 Bamshad Mobasher, S. S. (August 2003). Intelligent Techniques for Web Personalization. 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